Gazprom to soon complete bulk of pipeline work to ship gas to China

By

Renzo Pipoli

Russia's Gazprom will soon complete the bulk of the work for one its most ambitiuos projects ever that involves building a natural gas pipeline from Siberia to its border with China. Pictured is Gazprom pipeline construction for the Turkish market. Photo courtesy of Gazprom

Nov. 21 (UPI) -- Russia's Gazprom told China's biggest oil and gas company CNPC that "the bulk of the work" on a pipeline that will transport Russian gas to China, one of the most ambitious projects ever undertaken by Russia, will be completed next month.

Gazprom said that it held talks with China National Petroleum Company (CNPC) on Tuesday regarding advances stemming from a 2014 accord, when Gazprom agreed to sell 38 billion cubic meters per year of gas to CNCP via the new Power of Siberia gas pipeline.

"The bulk of work on the Power of Siberia gas pipeline's linear part stretching from the Chayandinskoye field to the Russian-Chinese border would be completed before the end of 2018," Gazprom said in a Tuesday afternoon statement.

The Power of Siberia is a gas pipeline to deliver natural gas from Irkutsk and Yakutia production centers to the Russian Far East and China.

Vladimir President Putin said in May 2014, as he announced the project that represented a $55-billion investment, that it was "the largest in the gas sphere during the era of the USSR and Russia," as reported by The Guardian at the time. Operations were projected at that time to start in 2018.

According to a Financial Times report from April, 8,500 workers were on site to build the 1,864-miles long pipeline from Siberia to the Chinese border. The report estimated that the pipeline connection between the world's largest gas exporter and the biggest energy importer would take place in December 2019.

To put the 38-billion-cubic-meters-annually Russia-China contract in context, Financial Times said that in all of 2017 Gazprom supplied about 200 billion cubic meters of gas to Europe, equivalent to nearly 40 percent of all of the continent's demand.

China is working separately to build a pipeline connecting its border with Russia with Shanghai. The project involves construction of two underwater tunnels.

The two companies also discussed in the Tuesday meeting in Guangzhou advances in plans to build underground natural gas storage in China. Such storage normally taps depleted fields, aquifers or salt caverns.

The use of natural gas as direct fuel for vehicles, in both compressed and liquefied forms, was also discussed.

In addition to the Siberia gas accord, Gazprom and CNPC signed in 2015 an accord to deliver Russian gas from western Siberia.

As for China National Petroleum Company (CNPC), it has natural gas output of 103 billion cubic meters per year in China, according to the company's website. The company also produces and refines crude oil and has a network of 21,399 service stations in China.

CNPC already has over 33,600 miles just of gas pipelines in China, about 76 percent of the total in the country. It also owns most of the crude pipelines and about half the refined product pipelines.